THE NATURAL CAPITAL DECLARATION
The Natural Capital Declaration was launched at the UN Conference on Sustainable Development (Rio +20) in 2012.
It has since been signed by the CEOs of more than 40 financial institutions, demonstrating their commitment to the eventual integration of natural capital considerations into financial sector reporting, accounting, and decision-making by 2020.
The four commitments as stated in the Declaration are:
- Build an understanding of the impacts and dependencies on natural capital relevant to our operations, risk profiles, customer portfolios, supply chains and business opportunities.
- Support the development of methodologies that can integrate natural capital considerations into the decision-making process of all financial products and services - including in loans, investments and insurance policies. We recognise that given the diversity of the financial sector, embedding natural capital considerations will differ across asset classes and types of financial institutions. We therefore aim to build on work undertaken through other initiatives, such as the UN-supported Principles for Responsible Investment, the Equator Principles, the United Nations Environment Programme Finance Initiative (UNEP FI) Principles for Sustainable Insurance, and The Economics of Ecosystems and Biodiversity (TEEB), so that we can develop methodologies to:
- Apply a holistic approach to evaluating bonds and equities through the integration of natural capital considerations in environmental, social and governance (ESG) risk analysis in short, medium and long-term growth forecasts of investee companies;
- Systematically consider and value natural capital considerations in the credit policies of specific sectors, including commodities, that may have a major impact on natural capital either directly or through the supply chain;
- Systematically consider and value natural capital considerations in core insurance business strategies and operations including risk management, risk underwriting, product and service development, claims management, sales and marketing, and investment management.
- Work towards building a global consensus for the integration of natural capital into private-sector accounting and decision-making; supporting, when appropriate, the related work of The Economics of Ecosystems and Biodiversity (TEEB) for Business Coalition, and other stakeholders.
- Collaborate, when appropriate, with the International Integrated Reporting Council and other stakeholders to build a global consensus around the development of Integrated Reporting, which includes natural capital as part of the wider definition of resources and relationships key to an organisation’s success.